Social Services Minister Christian Porter is on the hunt for savings in his new portfolio, hinting spending cuts on carer and disability payments may be needed to get the budget back to surplus.
In comments that echo his predecessor, Scott Morrison, Mr Porter told Alan Jones on Sky News that his portfolio “has to be a contributor to slowing the growth of expenditure down”.
Noting that the Department of Social Services spent $137 billion last year – about a third of the federal budget – Mr Porter warned that welfare was growing faster than any “other single budget in government”.Social Services Minister Christian Porter (right) sits on the frontbench in Parliament with Minister for Justice Michael Keenan and Minister for Small Business and Assistant Treasurer Kelly O’Dwyer. Photo: Alex Ellinghausen
Dismissing the option of hoping “things turn our way internationally [in terms of iron ore prices]” and increasing taxes, Mr Porter said “the solution has to be to slow down expenditure growth”.
In the Tuesday night interview, the former West Australian treasurer singled out support for carers, which he said has been growing at 14 per cent per year over the past decade, as well as the Disability Support Pension.
The new minister, who also welcomed his first child the day after he was sworn in in September, said Parliament also had to “restrain” the growth in Family Tax Benefits.
“[This] is another massive area of expenditure, in excess of $20 billion worth of taxpayers’ money a year.”
The government has so far struggled to get the crossbench support needed to make cuts to Family Tax Benefits, which the Coalition says will pay for childcare reforms. The proposed cuts include stopping Family Tax Benefit Part B when a youngest child turns six.
Mr Porter also leant his support to broader reforms to the welfare system, which were first floated by Mr Morrison’s predecessor, Kevin Andrews.
A report headed up by welfare expert Patrick McClure this year recommended the government streamline the huge number of welfare payments to just five primary payments.
Mr Porter said he has spoken to Mr McClure on Tuesday and agreed the system needed to be changed.
“It’s impossible to imagine a system that is more complicated than the one we have … 20 payments categories, 55 different sets of sub-payments, indexations that occur twice a year, sometimes once a year, on a range of different measures,” he said.
“You have to tackle it segment by segment but we cannot go on the way that we have.”
Social security and welfare spending was projected to grow by $11.7 billion between 2014-15 and 2017-18. This is the most of all government areas, with health projected to grow by $2.6 billion and Defence by $1.5 billion.
But Treasury projections in the Intergenerational Report show that based on current policy settings, payments to individuals – which include family tax benefits and the dole but not the age pension – are due to fall from 4.5 per cent of GDP to 3.4 per cent by 2054-55.
Under current policy settings, spending on the age pension would climb from 2.9 per cent of GDP to 3.6 per cent over the next 40 years. If 2014-15 budget measures to increase the pension age and decrease indexation levels were approved, spending would drop to 2.7 per cent of GDP.
According to the OECD, as of 2014, Australia spent less on “social expenditure” compared to most countries in the OECD, including the United States, Britain, New Zealand, Germany, Italy, Japan and France.
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